A demand responsive bidding mechanism with price elasticity matrix in wholesale electricity pools

Abstract

In the past several decades, many demand-side participation features have been applied in the electricity power systems. These features, such as distributed generation, on-site storage and demand response, add uncertainties to both the short-term and long-term operation of the modem power systems. On the contrary, many modem power systems are characterized by the deregulated market structure. How to operate these features under deregulated power markets is worth consideration. This thesis presents a new demand responsive bidding mechanism in wholesale electricity pools. The proposed bidding mechanism models demand response with Price Elasticity Matrices (PEM). Under the proposed bidding mechanism, the resultant generation schedules and electricity rates become dependent variable on demand response. This relation gives bidding results that are closer to the actual market equilibrium. By applying this bidding mechanism, more efficient market behaviors are achieved in the short term, and generation and transmission resources are better utilizes in the long term. In addition, compared to the market clearing price and generation dispatch schedule settled by the traditional bidding mechanisms, bidding results obtained under our proposed mechanisms are more effective instructions for the design and implementation of demand-side participation programs. This thesis presents the design of the proposed bidding mechanism in terms of its bidding rules, bidding acceptance rules and settlement rules. The bidding mechanism's mathematical model is formulated as an optimization problem.

(cont.) Bidding results are obtained as closed-formed solution of the optimization problem. In addition, this thesis presents an improved market interaction algorithm to implement the bidding mechanism. Multiple benefits of applying the bidding mechanism are shown by numerical example under various system statuses and end-user response types.